By Jerry Goldberg
The national strike by 49,000 United Auto Workers (UAW) workers against General Motors that started on September 15, 2019, has captured the enthusiasm of the working class. There have been numerous mass picket lines and rallies attended not just by rank and file auto workers, but members from other unions and many progressive activists, including youth.
The strike centers on demands to end the three tier concessionary wage system that has now been in effect for over ten years, despite a return to record profit levels by the auto companies (about $17 billion in the last two years). It also was sparked by GM’s plant closing announcements over the past year which are a direct violation of the Plant Closing Moratorium in the last UAW GM contract, as well as promises to maintain production in exchange for a massive federal bailout in 2009 and tax breaks which allow GM to avoid paying federal and state taxes.
Two Tier Wages Introduced In 2007
The UAW traditionally was a union based on solidarity among its members. When the author of this article worked at Ford in the 1970’s, 90 days after hire you were at full wage and benefit parity with your fellow workers on the assembly line, and entitled to full union protection. And while this period for wage parity was extended somewhat over the years, it remained in effect until 2007.
At that time, faced with a recession in the US, and increased globalization of US auto production including competition with non-union foreign auto companies within the US, the UAW leadership unfortunately embraced the idea that the only way for the union to survive was by cooperating with the corporations in lowering wages for new hires.
In 2007, a two tier wage system was introduced on a large scale into the auto plants. New hires were hired in at $15.25 per hour, compared to the $27.30 per hour earned by seniority workers. Most importantly, the second tier became permanent, with wages capped at $16.72 an hour (compared to $30.64 an hour for seniority workers). In the 2011-2015 UAW contract with GM, Ford and Chrysler, new hires came in at $14.78-$15.78 with wages capped at $19.28 per hour.
Pensions were eliminated for second tier workers, and they received lesser health benefits as well. While the percentage of second tier workers was to be capped at 20% of the workforce there were numerous exceptions allowed and some plants have as many as 40% second tier workers.
2015 Contract Modifies Second Tier Wages, Adds Third Tier
When GM first implemented the two tier wage system, the corporation was in the midst of a downturn in the auto industry. The corporation reported a net loss of $30.943 billion in 2008. At that point, the federal government stepped in with a massive bailout, amounting to over $68.2 billion (of which $8.9 billion was never paid back).
With the bailout funds at its disposal, GM returned to profitability in 2009, earning $104 billion. And using those funds to further restructure the company, GM has basically continued to make large profits ever since, with $4.6 billion in 2010, $7.585 billion in 2011, $4.859 billion, in 2012, $3.77 billion in 2013, $2,804 billion in 2014, and $9,687 in 2015.
As a result, in the 2015 UAW-GM contract, the union was able to win changes to the two tier wage system. The contract provided an eight year path so that all second tier workers would eventually arrive within $2 per hour of wage parity with traditional seniority workers by September 19, 2022. While the contract allowed for full health care benefits for second tier workers and payment of profit sharing, the second tier workers continued to be deprived of pensions paid to seniority workers, except for a 401K plan. The 30 and out pensions that had been one of the great accomplishments of the UAW since the 1930’s were eliminated for second tier workers.
In addition, the 2015 UAW contract provided for a third tier of auto workers. These workers hire in at $15.78 per hour with a maximum pay rate of $19.28 per hour after 5 years ($22 per hour for temporary workers hired before 2015). They receive lesser health benefits, with no dental or vision provided. They receive no pensions and no profit sharing.
While these workers are labeled “temporary workers” or “flex workers”, they are temporary in name only. There is no guaranteed path to ever becoming full time. On the picket line at GM’s Hamtramck Assembly Plant on September 22, 2019, this writer spoke to a worker who would love to work full time, but instead has been maintained on temporary status since 2013. He hired in at the Warren Transmission plant and now works at the Lake Orion Assembly plant. He gets no guaranteed job assignment, no seniority rights, and is the first laid off and last recalled at the plant. He is not guaranteed any number of hours per week, unlike full-time employees who are entitled to short work week and Supplemental Unemployment benefits if they are laid off. His pay had increased from $15.78 to $21 per hour when he was laid off from Warren Transmission. When he was recalled to Lake Orion assembly after a two year lay off, he lost the wage hikes he had accumulated and saw his wage cut back to the $15.78 starting pay. His status is comparable to an at will employee, despite being a dues paying member of the union.
An article in Automotive News, points out that approximately 10% of GM’s hourly workforce is composed of temporary workers, with FCA (Chrysler) employing a similar number and Ford’s workforce 6% temps. The article points out the automakers want to add more temporary workers, and there are many reports of expanded use of temporary workers whenever new production is introduced.
Strike Challenges Continued Restructuring And Job Elimination By Auto Corporations
A major factor precipitating the strike against General Motors, was the corporation’s declaration last November of its largest round of plant closings in a decade, including the closing of the Warren Transmission Plant and Detroit Hamtramck Assembly plants in Michigan, Lordstown Assembly Plant in Ohio, Baltimore Operations in Maryland, and Oshawa Assembly Plant in Ontario, Canada. The plant shutdowns would idle a total of 6705 workers. Lordstown and Warren Transmission have already been closed, and the production of the Volt has been eliminated at the Detroit Hamtramck Plant, reducing the plant’s workforce from 1500 to 700 workers.
This new round of plant shutdowns was announced in blatant violation of the Moratorium on Plant Closings included in a memorandum in the 2015 UAW-GM contract. The memorandum stated: “Subject: Plant Closing Moratorium… this will confirm that during the term of the new Collective Bargaining Agreement, the Company will not close, idle, nor partially or wholly sell, spin-off, split-off, consolidate or otherwise dispose of in any form, any plant, asset, or business unit of any type, beyond those which have already been identified, constituting a bargaining unit under the Agreement.”
This new round of plant closings follows what has been an unprecedented restructuring of and massive job elimination in the auto industry over the past 40 years. In 1970, there were 395,000 GM hourly workers in the U.S. represented by the UAW with 60,000 hourly workers in Flint alone. By 1999, GM’s national hourly headcount had been reduced to 210,00. By 2007, the UAW represented only 74,000 GM workers, and Flint’s GM workforce had been reduced to 6,717. And today, it is down to the 49,000 GM workers striking the corporation.
While the number of GM production workers has gone down from 210,000 in 1999 to 49,000 today, with similar cuts for Ford and FCA (Chrysler), US domestic auto production has been pretty steady during that period, going from 13 million vehicles produced in 1999 to 10.8 million last year. While there has been a 77% decline in hourly automobile employment from 1999 to the present, production has only declined by 17% during that time.
Part of that difference can be accounted for by outsourcing. Over the last 10 years, maintenance jobs and even some skilled trades work has been outsourced to corporations like Aramark. While many of these workers are still represented by the UAW, they are no longer covered by the contracts with the automakers, and are subject to lower wages and less benefits as a result.
In addition, with the introduction of robots and new technology into the plants, productivity has increased dramatically. It has risen 243% since 1950, 143% since 1970, and approximately 75% since the year 2000.
Time to Revive Fight for Short Work Week And Guaranteed Jobs
In the 1979 UAW contract struggle, the UAW fought for and won the beginnings of a short work week. One week out of the month, workers were given a paid personal holiday, meaning for that week they were paid 40 hours pay for 32 hours worked. Even this limited short work week forced the companies to hire tens of thousands of workers to maintain production. The paid personal holidays were especially embraced by workers who would never miss a day of work. It compelled them to step away from work and enhanced their quality of life greatly.
Unfortunately, during the recession of 1979-1982, the UAW leadership gave up this limited short work week, in the face of demands by the corporations for concessions to “save the companies”.
Similarly, when GM announced massive plant closings and job losses in December 1986, a rank and file A Job is a Right Campaign developed around the demand for a moratorium on plant closings. The demand raised the idea that workers have a property right to their jobs, an idea popularized in the 1930’s by Maurice Sugar, the UAW’s legal counsel, which became the ideological underpinning of the Flint sitdown strike.
While the A Job is a Right Campaign wasn’t strong enough to stop the 1986-1988 GM plant closings, it succeeded in getting the idea of a plant closing moratorium inserted into the contract. The UAW leadership also succeeded in negotiating guaranteed lifetime jobs for auto workers, so workers no longer were subject to layoffs and the loss of their jobs at the bosses whim.
Unfortunately, as with the short work week, the guaranteed jobs demand was abandoned by the UAW leadership and removed from the contracts in the concession agreements of the late 2000’s.
Along with fighting to overturn two and three tier salary structures, it’s time for the rank and file to re-raise the demands for guaranteed lifetime jobs and a shorter work week. With productivity expanding exponentially, these demands are compelling today. Why shouldn’t the workers who produce everything get the benefits of technology, rather than it being used as a club to force them into concessions and givebacks while enhancing corporate profits.
The UAW/GM Strike Signals a Beginning In The Struggle For Workers’ Control Over Technology
In announcing her plants for massive plant shutdowns and layoffs last November, Mary Barra, GM CEO laid bare her thinking. GM needed funds so the corporation could plow money into electric vehicles and self-driving cars, which she described as the foundation of the company’s future.
So basically, CEO Barra is demanding that the auto workers fund the transition of GM to a “greener” company. And what is her plan to do this, to shut down production of small cars with decent gas mileage, in favor of carbon emitting gas guzzling SUVs and trucks. Of course the SUVs and trucks have a much higher profit margin than the gas efficient small cars like the Cruse which is being shut down.
In fact, GM made the same promise to the federal government, that it would move to gas efficient smaller cars and electric vehicles, when it received the $68 billion federal bailout during the bankruptcy. All that promise has delivered is the elimination of small car production along with the workers who produce them.
While GM’s last offer to the UAW was hailed by the media for its “investment” in future auto production, the reality of the offer was quite different. The GM offer included “$2 billion from joint ventures and supplier for new plants that would pay workers less than the top union wage.” For example, the proposal for the shutdown Lordstown plant, which employed 1600 workers at the time of its closing, would be to reopen the plant as a joint venture with a corporation with a questionable viability, as an electric vehicle battery assembly plant paying far less than the UAW top tier wage.
Strike Portends Future of Struggle for Green New Deal
CEOs like Barra, who earned $21.87 million last year, cannot be trusted to protect the jobs of the auto workers nor to bring the industry into the Green New Deal. The coalition that has emerged on the picket lines, with rank and file workers and unionists, progressive activists and youth marching together with unity and strength, portends the future. A Green New Deal controlled by the workers and oppressed, with every worker guaranteed a union job and a livable wage and living standard.
The author was a Ford Assembly line worker and is a UAW retiree. He was an organizer of the Job is a Right Campaign
This post was corrected on 10-3-2019. Net loss of $32,942 in 2008 was changed to $32.942.